House Committee Eliminates Blue Cross Tax-exempt Status

November 16, 1985|United Press International

WASHINGTON — The House Ways and Means Committee, starting a major push to finish a tax reform bill next week, voted Friday to tighten insurance tax rules, including eliminating the tax-exempt status of Blue Cross and Blue Shield.

Following the vote, the Blue Cross and Blue Shield Association said the action could prompt slightly higher premiums, but, more importantly, may cause numerous Blue Cross and Blue Shield plans to stop covering people who are already sick.

The Blue Cross and Blue Shield plans are ``bound to sit down and look and see if they should behave like a for-profit company,`` said Mary Lehnhard, vice president for government relations for the association.

Nationwide, there are about 11 million people with individual Blue Closs and Blue Shield coverage. They would likely be affected more than those who receive coverage through arrangements with their employers.